Brunei Can Emerge 'Key Logistics Hub'
By Hadi DP Mahmud

Bandar Seri Begawan - Brunei stands a good chance of becoming a key provider of ITbased solutions to support transport, supply management and logistics-related activities in the region, said a logistics industry analyst.

The sultanate can tap into this industry - which is currently dominated by Singapore, Thailand and Malaysia - by focusing on technological aspects, said Fauziah Talib, chief executive officer of consulting firm IQ Quest.

"Technology based on productivity is critical to the (logistics) industry, because in such a globalised environment, you have to ensure that you could transport it (products) at the lowest of costs and effectively and on time - and you need technology to ensure that can happen. That's where there is an opportunity for Brunei."

Brunei can jumpstart its bid for the lion's share of this industry without having to develop the technology. Instead, it can accelerate the process by buying into the best of existing technology, said the CEO of IQ Quest, a consulting firm that offers consultancy services in strategic planning, project management, human resource development and management, organisational development services and technology.

"Why Brunei? If you look at a lot of the companies that come over to this part of the world they can go to Malaysia, they can go to Singapore, they can go to Hong Kong. But Brunei offers you `quick access' to setting up the operations. Because the country is small, and you have a market that you can actually penetrate deeply - there is less competition. You are not saturated completely. You don't have to go shoulder to shoulder with bigger companies," she said.

For companies that would come to the sultanate, Brunei can provide them with an environment where it is politically stable, secure and has sufficient infrastructure for ICT already in place, said Fauziah.

If Brunei succeeds, the rewards could be huge. According to a report entitled `State of Logistics in China' by industry analyst ARC Advisory Group, China spent about one-fifth or 21.3 per cent of its annual GDP on logistics in 2004.

A lack of infrastructure (in China) creates a lot of inefficiencies, said ARC's Adrian Gonzalez.

"Administration cost is the real culprit. Even though labour costs (in China) are low, processes are not streamlined, and information systems and automated process are lacking."

And this is where countries like Brunei stand a good chance of making it as logistics systems providers.

The transport and logistics service industry consists of a range of businesses involved in the manufacturing, warehousing, selling, transportation and distribution of goods.

This industry is vast, encompassing companies involved in the entire supply chain process, from the purchasing of raw materials to the use of decision making software to optimise revenue and profit.

Supply chain management is the process of planning, implementing and controlling the operations of the supply chain with the purpose of satisfying customer requirements.  -- Courtesy of The Brunei Times

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